Cut up the credit cards: States have $5T in debts taxpayers will have to pay

Coast to coast, states are leaving taxpayers on the hook for massive debt payments over the coming decades as state governments continue to abuse their metaphorical credit cards.

A new report released this week says state governments have more than $5.1 trillion in debt, largely because of pension obligations to former and current state employees, which states now lack the assets to pay off. Pension debt accounts for more than $3.9 billion of that total, but the report also includes outstanding bonded debt, unemployment compensation trust fund debt and debt in the form of "other post-employment benefits," or OPEB, which is closely linked to pensions and includes retired public employees' health-care costs.

Though the totals vary significantly from state-to-state, it adds up to an average of more than $16,000 of debt for each man, woman and child in the United States.

Given states' propensity for putting things on their credit cards, it's those children who probably have the most to worry about.

Bob Williams, president of State Budget Solutions, the fiscally conservative state policy think tank that authored the report, said the trillions of dollars of debt are the result of "broken promises, reckless leadership and fiscal irresponsibility."

"Millions of Americans who interact with or rely on their state governments each and every day must understand their state's true fiscal condition," Williams said. "Unaddressed state debt will take its toll on state budgets as the money once expected to fund education, health care and more will have to be redirected to pay for these broken promises."